The economy entered a contraction phase due to the combined impact of accelerating inflation, the shortage of dollars (aggravated by the drought) and the clamp on imports.
The projections for 2023 are discouraging.
Private consultancies
forecast a drop in the level of activity of between 1% and 5%,
and there are few sectors that will be able to avoid the harsh impact of the crisis.
With projected annual inflation above three digits, the Minister of Economy, Sergio Massa, faces a very complex scenario due to the loss of purchasing power of income.
Juan Luis Bour, from Fiel, recalls that in January
the formal salary registered an interannual increase of 88% compared to inflation of 98.8%
.
"The informal falls more," he says.
Bour explains that with accelerating inflation and a government with no room to expand fiscal spending, "it is very difficult for the economy not to contract."
Fernando Marengo, from Arriazu Macroanalistas, agrees with this assessment.
“
The problem is that the only way to finance it is with issuance
”, He points out.
Issuing in this context, adds Marengo, would boost the demand for official dollars, a greater exchange rate gap, more clamps on imports and a rise in prices.
The government's dilemma, adds the economist,
is an equation between inflation and recession
. If one variable goes up, the other goes down, and vice versa.
"In between we have nuances and there are mitigating or intensifying factors," completes Lorena Giorgio, chief economist at the consultancy firm Equilibra.
He alludes, above all, to the possibility that Massa manages to bring dollars to the country (credits from bilateral organizations or with foreign banks, or increasing the swap with China, for example) to offset the losses from the drought, estimated at around US
$ 20,000 million
.
“Our base scenario is a drop in GDP of between 3 and 4.5%, which could be reduced to 1.5 or 2%, if foreign currency is obtained”, says Giorgio.
The fuel for the activity is dollars, which are mainly used to import inputs and machinery.
Giorgio contrasts other factors that could alleviate the trade balance, including the reduction in energy imports due to the construction of the Néstor Kircher gas pipeline, savings from tourism abroad and the increase in some exports.
"Likewise,
this year the Central Bank will have US$12 billion less than in 2022
," he says.
"A scenario of a shortage of dollars is incompatible with last year's production levels," introduces Ricardo Delgado, director of the Analytica consultancy.
And he adds that "the Government must decide if it affects the quantities (supply of products in the market) or the prices of imported goods."
Therefore, “
the most likely thing is that there will be a tighter control on imports
”, He says.
More clamps on imports
Analytica forecasts a 3% drop in GDP, "with a US$14.5 billion adjustment in imports (-17% compared to last year) and a loss of net reserves of around US$3.7 billion."
The figures corroborate, once again, that the recession is insufficient to stop the rise in prices.
"Inflationary inertia already runs automatically," interprets Delgado.
The rate of remarking deteriorates family income (especially in the informal sectors), which contaminates consumption.
“Until August 2022, the fall in real wages was limited by the post-pandemic economic recovery.
But
the year started with year-on-year inflation of 50% and closed with 94.8%
”, underlines Jorge Vasconcelos, from Ieral, the think tank run by economist Carlos Melconian.
The higher rate of price increases continued during February (102.5% year-on-year) and the indicator for March would mark a new rise.
"The acceleration of inflationary inertia is recessive since
49% of workers are not registered or are self-employed
, and they cannot index their income in parallel with prices," says Delgado, adding that, in this context, "the The best salary policy is to lower inflation”.
An Ecolatina report indicates that the economy in 2023 will be hit on multiple fronts.
And that in "this complex panorama", the only bet that the Government has left to avoid a greater economic contraction is private consumption.
"Public consumption (infrastructure works, for example) will not be a differential factor due to the strong restrictions" imposed by "the agreement with the IMF," the consultant details.
"The real economy loses momentum due to the drought, the clamp on imports, the drop in income (and consumption) and the uncertainty due to the election year," lists a study by Abeceb, but clarifies that the impact of the crisis on the sectors is heterogeneous.
One of them is the industry, which would close 2023 with a moderate rise of 1.4% after having grown 4.3% last year.
“
The sector that drives the most is the automotive sector
”, they indicate.
Natacha Izquierdo, an economist at Abeceb, predicts that "
oil and gas will be the Government's star item
due to its potential to substitute imports and increase exports of gas and crude oil in a context in which external restrictions and the shortage of foreign currency are pressing."
Izquierdo projects for this year
a rise of 13% in crude oil production and 6% for gas production
, "subject to progress in the construction of the gas pipeline."
In the sectoral x-ray of Abeceb, a general slowdown in activity prevails, in the best of cases.
For mining, for example, the consultancy headed by Dante Sica forecasts an increase of 2.3% compared to last year since "many investment decisions are postponed pending greater macroeconomic certainty and the rules of the game" .
Something similar occurs with construction: "Moderate growth of 1.8% is expected," explains Izquierdo.
Other positive indicators are repeated in items such as household appliances and electronics (projected growth of 2.2% in 2023 against 5.8% last year) and consumption in general, which would increase 1.7% this year after touching double digits. (9.8%) in 2022. These forecasts depend on the dynamics of the crisis.
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